CHAPTER TWOT Y P E S O F R E TA I L E R S

BY J E SS A LY N A N D B R A N D I E

THINGS WE ARE GOING TO TALK ABOUT:

• Characteristics

• Food Retailers• General

Merchandiser

• Service Retailers• Ownership Types

CHARACTERISTICS OF GENERAL MERCHANDISE RETAILERS

OBJECTIVES TO BE THINKING ABOUT:

• List the characteristics that define retailers

• Categorize the various types of food retailers

• Identify the various types of general merchandise retailers

• Explain the difference between service and merchandise retailers

• Illustrate types of ownership for retail firms

TYPES OF RETAILERS:• All retailers are characterized by:

– Types of merchandise they offer

– Variety and Assortment

– Services – Prices and the Cost of Offering Breadth and Depth of Merchandise and

Services

FOOD RETAILERS• Supermarkets

– Trends in Supermarkets Retailing

– Fresh Merchandise– Green Merchandise– Ethnic Merchandise– Private-Label Merchandise – Improving the Shopping

Experience

EXTREME-VALUE FOOD RETAILERS• Save-A-Lot’s limited assortment format• means that stores carry the most• frequently purchased grocery items in• the most popular size and variety

• The company carries high quality• exclusive brands – many produced by the same manufacturers of leading name brands – and an

assortment of nationally branded items.

• This allows Save-A-Lot to offer savings of up to 40% compared to conventional grocery stores – without asking shoppers to sacrifice quality.

FOOD RETAILERS CONT.

• Supercenters

• Warehouse Clubs

• Convenience Stores

•BIGGEST CONVENIENCE STORE Texas of course

GENERAL MERCHANDISE RETAILERS

• Specialty Store

• Drugstore

• Extreme-Value Retailers

• Off-Price Retailers

• Department Stores

• Full-Line Discount Stores

• Category Specialist

Department Stores

• Competition -Discount Stores on Price -Specialty Stores on Service,

Depth of Assortment• Lower Cost by Reducing Services

(?) -Centralized Cash Wraps• More Sales (?) -Customers Wait for Sale• Focus on Apparel and Soft Home• Develop Private Labels and

Exclusive Brands

THREE TIERS OF DEPT STORES• First Tier: Upscale, high fashion chains with exclusive designer

merchandise and excellent customer serviceNordstrom, Neiman Marcus, Saks

• Second Tier: Retailers sell more modestly priced merchandise with less customer serviceMacy’s

• Third Tier: Value oriented caters to more price conscious customerJCPenney, Sears, Kohl’s

DISCOUNT STORE OBSTACLES

■ Only Big Left Wal-Mart, Target

■ Wal-Mart’s Dominance

■ Differentiate StrategyWal-Mart = Low Price and Good valueTarget = More Fashionable Apparel

■ Competition from Category SpecialistsToys-R-Us, Circuit City, Sports Authority

SERVICE RETAILING

• Service Retailers:

Type of Service Service Retail Firms

Airlines American, Delta, British Airways, Singapore AirwaysAutomobile main/repair Jiffy Lube, Midas, AAMCOAutomobile rental Hertz, Avis, Budget, AlamoBanks Citibank, NCNB, Bank of AmericaChild care centers Kindercare, GymboreeCredit cards American Express, VISA, MastercardEducation University of Florida, Babson CollegeEntertainment parks Disney, Universal Studios, Six FlagsExpress package delivery Federal Express, UPS, US Postal ServiceFinancial services Merrill Lynch, Dean WitterFitness Jazzercise, Bally’s, Gold’s GymHealth Care Humana, HCAHome maintenance Chemlawn, MiniMaid, Roto-Rooter

DIFFERENCES BETWEEN SERVICE AND MERCHANDISE RETAILERS

■ Intangibility Problems in Evaluating Service Quality Performance of Service Provider

■ Simultaneous Production and Delivery Importance of Service Provider

■ Perishability No Inventory, Must Fill Capacity

■ Inconsistency of the Offering Importance of HR Management

TYPES OF OWNERSHIP

■ Independent, Single Store Establishments

Wholesale-sponsored voluntary group

■ Corporate Retail Chains■ Franchises

FRANCHISE BUSINESS MODEL